The Bio-Gen Biomass Power Generation Project (Phase II) involves construction and operation of a privately owned
and operated 15 megawatt (MW) biomass waste-to-energy plant in Sava, Honduras. The plant will utilize wood wastes
generated from forest products processing and palm oil production in the region. The wastes, which include sawmill,
logging, and palm tree plantation residues, are currently burned under uncontrolled conditions, disposed of in
rivers or other low-lying areas, or left to decay in place. Power produced by the plant will be sold to the
national utility, Empresa Nacional de Energia Electrica (ENEE), and will displace electricity and associated
greenhouse gas (GHG) emissions that would have been produced by fossil fuel-burning facilities.

4. Participants:

Name of Organization or Individual

Country

Biomasa-Generacion, S. de R. L.

Honduras

Nations Energy Corporation

U.S.A.

International Utility Efficiency Partnerships, Inc. (IUEP)

U.S.A.

Item

Organization

Name of organization (original language)

or

Name of individual if unaffiliated with any organization

Biomasa-Generacion S. de R. L.

Name of organization (English)

Acronym (original language)

None

Acronym (English)

None

Department

Biomasa-Generacion (Bio-Gen)

Function(s) within the AIJ project activities

Project development, project administration

Street

Apartado Postal #332

City

Tegucigalpa

State

Post code

Country

Honduras

Telephone

504-394679

Fax

504-394684

E-mail

World Wide Web-URL address

Administrative Officer Responsible for the Project

Surname

Lima M.

First name, middle name

Ricardo

Job title

President

Direct telephone

504-394679

Direct fax

504-394684

Direct e-mail

Contact Person for AIJ Activities (if different from the Administrative Officer)

Surname

First name, middle name

Job title

Direct telephone

Direct fax

Direct e-mail

Item

Organization

Name of organization (original language)

or

Name of individual if unaffiliated with any organization

Nations Energy Corporation

Name of organization (English)

(Same as above)

Acronym (original language)

None

Acronym (English)

None

Department

Function(s) within the AIJ project activities

Project development, financing

Street

422 West Fairbanks Avenue, Suite 300

City

Winter Park

State

Florida

Post code

32789

Country

U.S.A.

Telephone

407-647-7747

Fax

407-647-7751

E-mail

World Wide Web-URL address

Administrative Officer Responsible for the Project

Surname

Bower

First name, middle name

Mark

Job title

Director of Projects

Direct telephone

407-647-7747

Direct fax

407-647-7751

Direct e-mail

Contact Person for AIJ Activities (if different from the Administrative Officer)

Contact Person for AIJ Activities (if different from the Administrative Officer)

Surname

First name, middle name

Job title

Direct telephone

Direct fax

Direct e-mail

5. Description of AIJ project activities

Item

Type of Project

Sector(s)

Energy, waste

Primary activity(ies)

Alternative energy generation (wood waste)

Project Location

Country

Honduras

Exact location (city, state, region)

15 km NW of the city of Sava, in the Department of Colon

Key Dates and Current Stage of Project

Project starting date (month/year)

January 1997

Project ending date (month/year)

December 2017

Project lifetime (years)

21

Current stage of project

In progress

General Project Description and Technical Data

The Bio-Gen Biomass Power Generation Project establishes a 15 MW biomass waste-to-energy plant that will be
privately owned and operated by Biomasa-Generacion in Sava, Honduras. Electricity generated by the plant
will be sold to the national utility, Empresa Nacional de Energia Electrica (ENEE), to meet a portion of
Honduras's energy demand. The plant will utilize sawmill, logging, and palm tree plantation residues
for fuel, and is expected to operate at least 7,500 hr/year for 20 years.

From 1993 to 1994, Honduras, like many Latin American countries, suffered from significant electric supply
interruptions due to an over-dependence on variable energy supplies. Currently, 60% of the total grid or
433 MW is hydroelectric, and 40%, or 297 MW, is thermal. The electric supply interruptions have cost
Honduras millions of dollar in terms of GDP. Furthermore, energy demand in Honduras is anticipated to
increase at a rate of 6 percent per year until 2000. In order to meet this increasing energy demand under
current conditions, ENEE has plans to expand its fossil fuel capacity by 100 MW by 1999. President Reina
and Minister Sandoval have shown leadership in promoting changes to Le Marca to promote renewable energy
development in Honduras.

Electricity from the Bio-Gen plant will displace electricity that would have otherwise been generated by
new fossil fuel capacity, and thus will offset GHG emissions from fossil fuel use.

6. Cost

(a) Explanation of methodology for calculating cost data

This information is considered confidential by the developer and is therefore not available.

(b) Cost data-Project development

This information is considered confidential by the developer and is therefore not available.

(c) Cost data-Project implementation

This information is considered confidential by the developer and is therefore not available.

7. Monitoring and verification of AIJ project activities and results

Item

Party(ies) that will be monitoring project activities

Bio-Gen and subcontracted independent testing firms.

Party(ies) that will be externally verifying project results

The external verifier has not been selected at this time. The qualifications and affiliation of the
external verifier will be provided upon selection of an acceptable candidate.

Date when the monitoring plan became (or will become) operational (month/year)

Monitoring was to begin prior to the commencement of construction in the first quarter of 1997.

Types of data that will be collected

Stack gas emissions and feedstock sources will be monitored.

Description of Monitoring and Verification Activities and Schedule for Implementation

Independent testing firms will monitor the project, using U.S. Environmental Protection Agency (EPA)
emission test protocols and quality assurance procedures for stack gas emissions. The participants also
have agreed to monitor the sources of all feedstocks.

Pre-construction monitoring tasks include the establishment of baseline data for selected sites and
representative installations. Post-construction tasks include quarterly monitoring of emissions from the
proposed waste biomass facility. Site visits will be conducted annually to determine any changes in the
greenhouse gas emission measurements and estimates.

B. Governmental approval

Item

Please check one of the following.

This report is a first report.

or

This report is an intermediate report.

or

This report is a final report.

Please check one of the following:

This report is a joint report.
Letter(s) of approval of this report from the designated national authority of the other Party(ies)
involved in the activity is(are) attached in Section J, Annex.

or

This report is a separate report.

Additional comments (if any):

C. Compatibility with, and supportiveness of, national economic development and socioeconomic and environmental
priorities and strategies

Compatibility with Economic Development and Socioeconomic and Environmental Priorities

The Government of Honduras views the Bio-Gen Biomass Project as a key part of its plan to integrate a
portfolio of private sector renewable energy projects into the country's electricity grid to help the
country meet its current and future energy needs in a fiscally and environmentally sustainable manner.

D. Environmental, social/cultural, and economic impacts of the AIJ project

Non-Greenhouse-Gas Environmental Impacts of the Project

Air Pollution: Levels of particulate matter, the primary air pollutant to be emitted by the plant,
will be in compliance with World Bank lending standards. The remaining particulate emissions are expected
to be considerably less than those that currently result from open burning of logging and processing
waste.

Water Pollution: River sedimentation from road construction and site preparation will be controlled
using stormwater management techniques. Longer term impacts to the stream will be associated with the
volume of cooling water intake for the boiler and the temperature, chemical composition, and volume
differential of discharge water to the river or impoundment. The preliminary design for the project
contains provisions for effluents from the plant to be routed to a common retention pond for equalization
of pH, settling of suspended solids, and cooling, while sanitary wastes will be handled through an on-site
septic system. Although the retention pond will allow for some cooling, the effluent may still increase
stream temperature above ambient levels. If the effluent is not evenly distributed, a thermal plume may be
created, potentially increasing growth of potentially harmful organisms near the plant and therefore
necessitating water quality monitoring. The chemical composition of the effluent will be below accepted
standards in the United States.

Soil and Forest Resources: Erosion following construction of roads and alteration of site topography
may be minimized by the low slopes and thin, coarse-textured soils of the region. The impact on forest
resources will be minimal since all fuel for the plant will come from waste products from existing
industries. No forest resources will be used that are not already being discarded or left to decay by these
industries.

Human Health: Air quality and therefore human health is expected to improve in the region
surrounding the plant due to decreased open burning of wood wastes by nearby mills.

Biodiversity: Because of controls imposed by the Honduran government, deforestation and other
habitat loss is not expected to significantly increase as a result of this project. Land that will be
cleared to construct the plant and to grow long-term energy plantations is considered to be low in
biodiversity and not critical to threatened or endangered species.

Transportation: Transportation of wood waste to the generating site will increase traffic, road
degradation, and noise and air pollution in the immediate vicinity. These effects will be mitigated by
increased road maintenance efforts and reductions in transport of wood wastes from other mills to disposal
sites.

Solid wastes: Solid wastes generated by the project facility (e.g., ash and trash) will be disposed
of locally and managed so as to minimize stormwater runoff and wind transport, and to prevent fugitive dust
from reaching workers at the project facility.

Social/Cultural Impacts of the Project

Solid wood waste from pine sawmills is utilized by local residents to produce salable secondary wood
products including bricks, building materials, and fences. Because volumes of waste and incomes associated
with the sale of secondary products are difficult to establish, no quantitative or qualitative estimates of
the degree of potential impacts are possible without more detailed study.

Wood waste is also sold as firewood. In some areas, this is a common use of solid wood waste. However,
because of the high resin content of pine, other types of wood are preferred. Although alternative sources
of fuel are available, including kerosene, propane, and butane, these are considerably more expensive than
wood and necessitate purchase of a special stove.

Economic Impacts of the Project

The project will contribute to the economic development of Honduras by supplying renewable and more
reliable power to the national utility. The present energy shortage in Honduras requires ENEE to initiate
selective power cuts per day, preventing sawmill owners from operating in an efficient manner. Since lumber
and secondary wood products are a major export commodity for Honduras, the power shortages have a negative
effect across the Honduran economy.

This project may also act as a catalyst to the formation of similar projects at other mills and within
other industries, allowing more industrial facilities to become increasingly self-sufficient in their power
supply. Conversely, the use of biomass to generate electricity may divert biomass from local people who use
it to produce salable items and generate income.

Has the reference scenario changed since the last report? (If yes, explain any changes below.)

Yes

No

This is the first project report.

Description:

In the absence of the project, the project developers assume that ENEE would be required to meet the
increasing energy demand in Honduras by expanding its fossil fuel capacity. In addition, sawmill, logging,
and palm plantation wastes would continue to be disposed of through uncontrolled burning, dumping into
rivers and low-lying areas, or by leaving it to decay in place.

Predicted Project Scenario

Primary activity(ies)

Alternative energy generation (wood waste)

Description:

The Bio-Gen project will generate electricity by burning sawmill, logging, and palm plantation wastes
through a controlled combustion process. Electricity from the project facility will displace electricity
that would have otherwise been generated by new fossil fuel capacity. The project will also reduce
emissions from uncontrolled burning and decomposition of the wastes.

Actual Project

Primary activity(ies)

This information is not yet available.

Description:

This information is not yet available.

2. GHG emission/sequestration calculation methodology

GHG Emission/Sequestration Calculation Methodology

Site number

1

Project sector(s)

Energy, waste

Description of Calculation Methodology for the Reference Scenario

Reference case emission estimates are based on emissions from a fuel oil-fired plant that would likely be
constructed in the absence of the 15 MW Bio-Gen facility. Only CO2, the major GHG that would be
emitted, is estimated. Because data are currently not available on GHG emissions from uncontrolled burning
and decomposition of wastewood in Honduras, these emissions are not included in the reference case
either.

To calculate annual CO2 emissions from the displaced fossil fuel capacity, the developers have
assumed that approximately 260,423 lbs/hour (hr) of dry gas is emitted from a 15 MW fuel oil-fired plant
under optimum operating conditions and that 13.4 percent of the dry gas emitted is CO2. This
yields a CO2 emission factor of 34,897 lbs/hr. Because the Bio-Gen plant will operate a minimum
of 7,500 hr/year, the reference case assumes the same number of hours of operation for the fossil fuel
plant.

Average annual reference case emissions are calculated by multiplying 34,897 lbs CO2/hr by 7,500
hr/year. The result is then converted from pounds to metric tons by dividing by a conversion factor of
2,205 lbs/t. Using this methodology, it is estimated that 118,697 t CO2/year are emitted due to
fuel oil consumption in the reference case.

Description of Calculation Methodology for the Project Scenario

Under the project scenario, annual emissions result from burning sawmill, logging, and palm plantation
wood-wastes at the Bio-Gen plant, but estimates of these emissions have not been derived. However, these
emissions are not expected to be greater than the reference scenario emissions from uncontrolled burning
and decomposition, which also have not been estimated. Therefore, annual project scenario emissions are
estimated as zero over the lifetime of the project.

Description of Calculation Methodology for the Actual Project

This information is not yet available.

3. GHG emission/sequestration data

(a) Reporting of GHG emissions/sequestration

(b) Additional information on GHG emissions/sequestration

Indirect or Secondary GHG Impacts (Positive and Negative)

The most significant secondary GHG impact will result from clearing trees and scrub to prepare the project
site for construction. The effect of such cutting in the overall carbon accounting is minimal.

Factors That Could Cause the Future Loss or Reversal of GHG Benefits

Given the nature of this project-substitution of fossil fuel generated power with biomass power-loss or
reversal of benefits accrued will not be possible. Factors that may cause the loss of projected emission
reductions include natural disasters such as forest fires, hurricanes, etc.

Strategy for Reducing the Risk of Future Loss or Reversal of GHG Benefits

The project developer will take steps to minimize potential losses of future project benefits, including
obtaining insurance, assuring regular maintenance, and developing and implementing inspection protocols.

F. Funding of the AIJ project

1. Identification of funding sources

(a) Funding sources for project development

This information is not yet available.

(b) Funding sources for project implementation

This information is not yet available.

2. Assessment of additional funding needs

Current or Planned Activities to Obtain Additional Funding

This information is not yet available.

G. Contribution to capacity building and technology transfer

Contribution to Capacity Building and Technology Transfer

The project will transfer U.S. biofuel technology and give momentum to additional biofuel and other
renewable energy projects, both in Honduras and the Central American region. The project will also transfer
emission control technology and showcase environmentally sound construction techniques.